Stalled negotiations may cause loss of inpatient services through Eastpointe

By Margaret Fisher / Night Editor

Published: Saturday, August 9, 2014 at 06:42 PM.

Medicaid patients needing inpatient assistance for behavioral health or substance abuse services may have one less hospital to turn to.

Southeastern Health in Lumberton has not been able to negotiate a rate for providing services with Eastpointe, the 12-county managed care organization, or LME-MCO.

The situation could affect the availability of beds statewide.

SeHealth’s contract expired June 30, but it’s affiliate hospital, Southeastern Regional Medical Center, once an LME, or local management entity, before it merged with Eastpointe, still sees psychiatric patients on an emergency basis until they are stabilized and can be transferred to another hospital.

Southeast Regional is an independent nonprofit hospital in Robeson County with 30 inpatient psychiatric beds available.

Robeson County happens to have the highest poverty rate — 34.7 percent — in the state, compared with Lenoir County at 23.6 percent, Greene County at 27.1 percent, Jones County at 20.1 percent and statewide at 18 percent, according to the 2012 Bureau of the Census statistics.

The federal government repeatedly slashing Medicaid payments has put a squeeze on both MCOs, which manage the Medicaid dollars in their catchment area, and their providers.

Medicaid patients needing inpatient assistance for behavioral health or substance abuse services may have one less hospital to turn to.

Southeastern Health in Lumberton has not been able to negotiate a rate for providing services with Eastpointe, the 12-county managed care organization, or LME-MCO.

The situation could affect the availability of beds statewide.

SeHealth’s contract expired June 30, but it’s affiliate hospital, Southeastern Regional Medical Center, once an LME, or local management entity, before it merged with Eastpointe, still sees psychiatric patients on an emergency basis until they are stabilized and can be transferred to another hospital.

Southeast Regional is an independent nonprofit hospital in Robeson County with 30 inpatient psychiatric beds available.

Robeson County happens to have the highest poverty rate — 34.7 percent — in the state, compared with Lenoir County at 23.6 percent, Greene County at 27.1 percent, Jones County at 20.1 percent and statewide at 18 percent, according to the 2012 Bureau of the Census statistics.

The federal government repeatedly slashing Medicaid payments has put a squeeze on both MCOs, which manage the Medicaid dollars in their catchment area, and their providers.

And when one provider is dropped, it can affect consumers in the MCOs entire catchment area, as well as statewide, when it comes to inpatient beds of which there are so few options.

Jones said the waiting period for a bed could be as many as three days, statewide. Patients will likely be transported further from their homes and families.

According to statements from Thomas Johnson, SeHealth’s chief financial officer, the organization initiated “good faith” discussions with Eastpointe in May to negotiate a contract.

“SeHealth is merely requesting a rate that offsets the loss of supplemental Medicaid payments that were paid in addition to the base rate and previously funded LME professional services costs,” he wrote in an email, “while Eastpointe continues to retain funds inclusive of supplemental hospital payments available that they then retain in their fund balance.

Ken Jones, the CEO at Eastpointe, said the rate for Southeastern Regional is $463.95 for one bed per day — a figure set by the Division of Medical Assistance under the U.S. Department of Health and Human Services.

“I’ve looked at the other rates; it’s not very far off,” he said.

That base rate is a figure the state set for Medicaid inpatient psychiatric care a number of years ago and prior to the local management entities, or LMEs, becoming MCOs, said Julie Henry, vice president of the North Carolina Hospital Association. It was set in accordance with the N.C. State Plan Amendment.

While Henry and Southeastern maintain the base rate has remained fairly close to the amount set some years back before Southeastern merged with Eastpointe, a spokesman from the DHHS wrote in an email saying that psychiatric per diem rate was accurate as of January.

SeHealth is requesting $1,575.61 from Eastpointe — or more than three times the base rate — to offset the loss of supplemental Medicaid payments.

Jones said that could equate to millions of dollars.

Henry said Eastpointe receives additional funds per member per month (PMPM), which is based on total behavioral health care costs for Medicaid patients.

The DHHS spokesman wrote that Eastpointe’s weighted PMPM is $129.37, which is a capped payment to cover all services that they provide for their recipients.

But Johnson stated that federal and state cuts, including the supplemental Medicaid payments, and an increase of psychiatric indigent and emergency care patients has increased hospital costs, particularly in the lowest poverty-rated county in the state.

“Simply stated, Southeastern Health, at the inception of the initial contract, accepted the base rate from Eastpointe,” he wrote, “because the State’s Medicaid program was also providing supplemental payments to ensure the near coverage of the cost of delivering psychiatric services The rate offered by the Eastpoint MCO simply does not come close to covering costs, while the rate Southeastern Health has requested would merely reestablish reimbursement closer to the historical level.”

And that brings matters around to the state of the Medicaid health care system.

Legislators haven’t been able to come to a consensus on Medicaid reform and do not plan to expand the program, but they are expected to meet in November to discuss it again. They have even brought the idea of privatization into the picture.

Meanwhile, Jones said Eastpointe is reviewing it costs to see if there is justification to make changes to the base rate. He said it’s his top priority, but he’s concerned about raising it.

“When you begin to go outside your established method of setting rates, it could cause a chain reaction,” he said, “which could result in a real impact in being able to serve your Medicaid population — period.”

Eastpointe already provides $0.5 million to Southeastern Regional for indigent inpatients, or those without insurance who cannot afford to pay, and additional funds for outpatient care. According to the DHHS, they are not required to pay for non-Medicaid services.

“We don’t have a contract like that for any other hospital,” Jones said about the indigent care payments.

Johnson said the payments fund about 90 beds, but Southeastern provides care for more than 150 beds for indigent patients. In addition, SeHealth not only isn’t being paid supplemental funds, but MCO reimbursements for professional services, such as psychiatrists, are no longer available. He states the hospital is receiving less than one-third the reimbursements it used to receive for it’s Medicaid consumers under Eastpointe.

SeHealth recently issued a public notice that was sent to law enforcement, magistrates and others urging them to call Jones at Eastpointe and a number of legislators to voice their concerns over continuing to maintain mental health access at Southeastern Regional.

“We strongly believe that Eastpointe MCO is potentially in violation of both URAC (Utilization Review Accreditation Commission) standards,” Johnson wrote, “... regarding their obligation as an MCO to assure access to care in a reasonable time and distance.”

However, both entities hope to see a resolution through negotiation, as well as through the legislature.

“We do value the service and the 30 beds that are there,” Jones said. “That is definitely something that we feel like is needed in the area.”

Johnson wrote, “Southeastern Health remains committed to partnering with Eastpointe to ensure the continuation of vitally needed psychiatric services in our community. We are hopeful that Eastpointe will meet and negotiate with us in the near term, so we may continue to provide services to their consumers.”

Margaret Fisher can be reached at 252-559-1082 or Margaret.Fisher@Kinston.com . Follow her on Twitter @MargaretFishr.